Wall Street’s 60/40 formula was born in 1952 — the same year as the first credit card. A lot has changed since.
That’s why we created a new approach — The H.E.A.T. Formula — to empower investors to spot opportunities, think independently, make smarter (often contrarian) moves, and build real wealth.
Table of Contents
🔥 Here’s What’s Happening Now
Not a lot going on, market seems pretty numb to tariffs and the Fed (rate cut in September pretty certain). We rallied premarket on the semi tariffs yesterday, but gave it all back. That’s usually not good, will see if there is follow through today, so far there isn’t.
This is interesting, in a scary sort of way….
It's official:
The top 10% largest US stocks now reflect a record 76% of the US equity market.
This has officially surpassed the previous record set before the Great Depression in the 1930s.
By comparison, at the 2000 Dot-Com Bubble peak, the top 10%'s share was at ~73%.
In
— #The Kobeissi Letter (#@KobeissiLetter)
5:30 PM • Aug 7, 2025
This is also interesting. We are actively working on a way to isolate trades like this, more to come hopefully….
BREAKING: Representative Debbie Wasserman Schultz has bought stock in a company called Ichor, $ICHR.
Ichor designs components for semiconductor capital equipment.
This is the first time we have seen a politician buy the stock in over 8 years.
We'll be keeping an eye on $ICHR.
— #Quiver Quantitative (#@QuiverQuant)
1:55 PM • Aug 7, 2025
🧠 AI Is Rewiring the Consumer Sector
UBS just came out with a note on how the winners in the consumer sector will be the companies who use AI to enhance their business. It correctly notes that AI has moved past being a back-office tool. It’s now a strategic asset with front-to-back implications across:
Function | AI Use Case |
|---|---|
Demand Planning | Predictive analytics, real-time inventory control |
Marketing | Personalized offers, dynamic segmentation |
E-Commerce UX | Chatbots, AI-driven product search |
Logistics | Route optimization, warehouse robotics |
Customer Retention | LLM-powered service agents, proactive outreach |
Product Dev | Trend prediction, user feedback loops via AI |
AI is reshaping the sector's winners and losers — not just in margin efficiency, but in customer experience, inventory turns, and pricing power.
🏆 Consumer-Facing Winners: The AI-Enabled Retail Stack
✅ Top-Tier Public Companies Most Likely to Win with AI
Ticker | Company | Reason |
|---|---|---|
$AMZN | Amazon | AI-native DNA across logistics, recommendations, and Alexa UX. Prime Video using genAI to personalize thumbnails, A/B test content. |
$WMT | Walmart | Building its own LLMs for supply chain and store operations. Investing in AI-native last-mile logistics and predictive restocking. |
$COST | Costco | Lean model + AI for SKU optimization and inventory turns = margin edge. |
$MELI | MercadoLibre | Latin America’s Amazon—embedding AI into payments (via MercadoPago) and logistics to navigate inflation and delivery constraints. |
$HD | Home Depot | Deploying AI in contractor outreach, product recommendation, and predictive reordering for pro customers. |
$LVMUY | LVMH | AI used in luxury for CRM segmentation, demand prediction, and personalization. Dior, TAG Heuer using AI for campaign targeting. |
$BKNG | Booking Holdings | Using AI to match travel inventory with user intent. Leaner booking engine via AI chat, personalized bundles = margin expansion. |
🛠️ AI Infrastructure & Enabler Stocks That Will Benefit
✅ AI “Picks and Shovels” to the Consumer Boom
Ticker | Company | Role |
|---|---|---|
$PLTR | Palantir | Back-end orchestration for demand forecasting, real-time planning, and LLM agent deployment in enterprise settings. |
$SNOW | Snowflake | Powering data pipelines used for customer targeting, omni-channel UX, and personalization analytics. |
$NVDA | Nvidia | GPU compute at the edge + core data centers to power recommendation engines, AI-driven search, chatbots. |
$CRWD | CrowdStrike | As retail moves online, AI-native security platforms like Falcon are critical to protect personalized data. |
$SHOP | Shopify | AI upgrades in Shop Pay, smart inventory management, AI-assisted merchant tools. Becoming an AI-native small business OS. |
$DUOL | Duolingo | A consumer AI company dressed as edtech. AI tutors, gamified models, LLM-native UX — template for AI-first consumer engagement. |
$MSFT | Microsoft (Azure) | Retailers like Walmart, Target are building their AI stacks on Azure. Co-selling OpenAI-based tools through Azure’s cloud arm. |
🧠 Investment Framework: How to Model the Winners
🔹 Signals of a High-Leverage AI Consumer Company:
In-house LLM development or embedded APIs (not just outsourcing to ChatGPT)
Large omni-channel data footprint (customer, SKU, geo, pricing, returns)
Clear operational use cases: inventory efficiency, labor optimization, churn prevention
Repeatable product recommendation loops with measurable AI-driven conversion delta
🔹 Key Sector-Level Asymmetries
Winners: Retailers with tight supply chain feedback loops, AI-native e-commerce platforms, luxury brands using AI for CRM at scale
Losers: Legacy brick-and-mortar with limited online penetration or no internal AI capabilities
📊 Strategic Implications
Overlay AI progress signals into your consumer fundamental models
Companies with in-house ML teams or AI M&A should screen higher
Flag earnings transcripts with multiple AI references tied to execution
Monitor AI CapEx signaling from both sides of the stack
Amazon, Walmart, and Shopify are investing in internal AI, not just renting it
That CapEx = revenue for cloud, LLM, and edge infrastructure plays
Pair trade opportunity: AI winners vs legacy laggards
Long: $WMT / Short: $TGT
Long: $SHOP / Short: $EBAY
Long: $MELI / Short: $BABA (LATAM AI-native vs China slow AI pivot)
🔥 Tactical Trade Ideas
Theme | Long | Short/Fade |
|---|---|---|
AI-native e-commerce | $AMZN, $SHOP, $MELI | $EBAY, $BABA |
Big box w/ AI edge | $WMT | $TGT |
Luxury + AI CRM | $LVMUY | $CPRI, $PVH |
AI data infra | $SNOW, $PLTR, $MSFT | Legacy IT (e.g., $SAP, $ORCL) |
🏆 Final Rating: 9/10 Opportunity
AI will be to consumer retail what refrigeration was to groceries — a silent but transformational layer that redefines operational excellence and customer connection.
UBS is right: AI isn’t just a bolt-on for efficiency — it’s a full-stack differentiator. You should treat AI maturity as a strategic moat when evaluating consumer companies.
This launches today…..
📈 Stock Corner
Today’s stock is Kratos Defense and Security Solutions (KTOS)….
They had earnings last night and are not trading much pre market, so not sure how the market will react. Currently down 1% on 3,167 shares.
We talked about this in our podcast earlier in the week as they are the main drone company that is also working on hypersonic.
📬 In Case You Missed It
We get real deep into the weeds in this one on blockchain, stable coins, and crypto…
🤝 Before You Go Some Ways I Can Help
ETFs: The Antidote to Wall Street
Inside HEAT: Our Monthly Live Call on What Wall Street Doesn’t Want You To Know
Financial HEAT Podcast https://www.youtube.com/@TuttleCap Freedom from the Wall Street Hypocrisy
Tuttle Wealth Management: Your Wealth Unshackled
Advanced HEAT Insights: Matt’s Inner Circle, Your Financial Edge
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